Yes, its more likely caused by tip day... after all, it takes a few days to get your bank validated on coinbase, circle, etc.

Why don't miners jack txn fees today?  Its actually a small "issue" in the protocol.  Miners that search for a zero txn block have a tiny advantage.  But miners would not want to block movement from BTC to SCBTC.  It can only enhance the value of BTC since a BTC is convertible to an SCBTC at any time (and back).

Aside: This idea of a "rush" to scBTC does not make sense.  People "rush" to get a better deal.  But the deal will always be the same, so no need to rush.


But this "pre-mine" will be visible on the sidechain.  So I suppose if you want to move your BTC to a chain that is not fully backed that is your choice.  But no matter what happens you'll never be able to move more BTC back the the bitcoin blockchain than was put in because remember BTC is not actually "moved" it is "locked" on the bitcoin blockchain.



It depends on what you mean by "hurt".  Remember Peter R and how he was saying that the true value of BTC is the memory -- the blockchain history.  And so he was threatening to fork any altcoin project and "pre-mine" it to exactly match the bitcoin blockchain.

Sidechains will preserve the bitcoin "memory" -- the value of the blockchain history.  This will happen because you can move value on a N for M (constant) basis from the bitcoin blockchain to the sidechain, so the value ON the bitcoin blockchain will always be relevant.  In contrast, a wildly successful altcoin (personally I don't think it'll happen, but if it could happen on a sidechain it could happen on an altcoin) would drain value from the bitcoin blockchain.

Yes, a wildly successful sidechain could "hurt" bitcoin in the sense that the # of transactions on the bitcoin ledger goes down (moved to the sidechain).  But I don't classify this as "hurt".  In fact, some would see this as an advantage.  Bitcoin could hold huge value denominations of coins (1 or 2 BTC :-)) more safely than the high transaction speed, application specific side-chains.  And note the bitcoin will be a popular mining destination for our lifetimes at least because of the block reward -- every BTC mined is exchangeable N for M with scBTC on the sidechain.

Why "forced" to transfer?

Nobody is forced.  But if BTC owners could sell their BTC for $400 (say) and scBTC for $425, then arbitragers would naturally buy BTC, convert it to scBTC and sell it, making $25 (or the opposite).  So the price will never diverge significantly. 

You certainly could.  You could unlock (get on the bitcoin chain) exactly as many BTC as were locked regardless of how many ether you created.  So you could leave a bunch of bagholders on the sidechain.

How is this any different from Mt Gox, Moolah, altcoin pump and dump, etc?

Sidechains don't magically make people honest.


But one additional point: the "bagholders" on the sidechain now have coins whose value would float relative to bitcoin (there is no backing BTC).  So what they are left with is better than Gox or Moolah -- they are left with a functioning altcoin that presumably has some utility to them or they would never have moved BTC there in the first place.  A similar result could happen if someone 51%ed the chain and unlocked the backing BTC.

Yes, the conversion ratio AFAIK has to be algorithmically defined.  So even if its not 1:1 that fact is irrelevant.   If its 1:10 then its 10:1 to go back.  

Inca, the number of BTC that are put on the sidechain is irrelevant.  As long as there is a single Satoshi left "unlocked" on the bitcoin chain, that satoshi can be transferred into the sidechain for SCBTC.  So that Satoshi is worth its value in SCBTC.  As long as SCBTC has value, BTC would be a store of that value.

You're practically arguing against yourself here.  If some awesomely functional chain existed that had the potential to destroy bitcoin's value, would you prefer it to be an altcoin where none of your BTC transfers or would you prefer that it be a sidechain?  If the functionality was really that compelling you can be sure that it would eventually out-compete Bitcoin -- it just may take a few years longer as an altcoin.

Ok so some people should hire one or two of them away from Blockstream.  What's ridiculous is that large holders expect these people to work for free -- AND that there are so few core developers.

Don't fight to squelch proposed technological innovation just because you are afraid of the human political/legal/social organization that coalesced to implement it.  Keep in mind that this idea was proposed long before this organization existed...

That's right.  To state it clearly, there will be an arbitrage opportunity.  Buy BTC, transfer into SC, sell SCBTC, buy BTC.  So the price of bitcoin will be lifted with the added value sidechains bring.  In this sense inca, the child chain can never "destroy" Bitcoin even if it ends up carrying 99.9% of the transactions.

To address Cypherdoc and other people's "what if" questions about the future, "we" (as in the Bitcoin evangelizing crowd) have been selling bitcoin as the "TCP" (or "HTTP") of finance -- anything can be layered on it.  That is the "promise" of Bitcoin as a world currency.  But you can't really layer applications on top of it like you can TCP or HTTP, except in a very small 40 byte per txn area, and in the awkward colored coin concept.  Sure, you can make an independent app that happens to accept payment in Bitcoin, like a centralized storefront.  But that is hardly layered "on" the Bitcoin protocol.

Sidechains IS the technology that really lets us build anything "on" Bitcoin.  Because the value of Bitcoin is NOT in the code -- otherwise running on testnet and/or altcoins would be much more valuable.  The real value programmers want is having a digital, supply limited (etc etc) token with programmable behavior that HAS VALUE from day one.  (But right now Bitcoin does not really have "programmable behavior" -- all you can to is transfer it)

If sidechains don't happen I will still be invested in Bitcoin as a diversification especially given the indebtedness of important governments throughout the world.  However, I would revise my "end game" estimate downwards by 3-4 orders of magnitude (1000-10000x), esp. if the block size is also not increased.  I would expect, best case, Bitcoin to become crypto-"gold".  Held but rarely used.  Worst case, some highly functional altcoin takes over and BTC's value dwindles to 0.

You know, when BTC is exploding in adoption I tend to agree with you and see that perhaps BTC will survive in a role almost solely as the world reserve and international value transmission currency.

But when adoption metrics like # wallets, # txns, etc are just barely breaking levels set a year ago, when price is in a persistent downtrend and has supposedly hit the bottom (really this time it really has) several times, when at a guess 99.9% of merchants use a trusted centralized 3rd party payment processor -- no different from paypal or VISA in their ability to freeze your funds... this is when I say it is still very premature to eliminate markets that Bitcoin could optimize or enable.

If you really believe in the potential of digital currencies to take over practically every economic transaction, you'd realize that the Bitcoin protocol CAN'T adopt every feature developed in sidechains because some will be conflicting (fast vs slow block times for example).

I'm glad that a significant portion of the dev community is coalescing behind sidechains and honestly I think that part of why they need a company is because of the impossibility of this community to arrive at consensus as individuals.  

We can't even agree to raise the block size limit -- a limitation that, if unchanged will either dramatically limit Bitcoin's applicability, or will cause such high txn fees that a worldwide Bitcoin will be limited to high value transactions.  Either case opens up all kinds of avenues for traditional finances, fiat currencies, etc.  And the only downside is that the home user MAY not be able to run a full node.  

Well let me break it to you, if Bitcoin is so unsuccessful as to not require greater block size then hobbyists will be gone -- the radical, money revolution that Bitcoin promises will be unfulfilled and these people will be on the the next new thing.  And if Bitcoin is wildly, globally, successful with today's block size a single transaction will be so expensive individuals will own zero coins and so be uninterested in running a full node.

I mean come on... If I was a tinfoil hat wearing type, I'd really begin to suspect some of you guys.

Nobody would use that sidechain if those new coins/tokens were not backed in some other manner.


Just like everything else in this world from used cars to altcoins you can get scammed.  One "sidescam" does not mean sidechains are a bad idea.

The classic example of a valuable sidechain is one that allows native support for other securities, bonds, backed commodities, including atomic anonymous decentralized exchange.  This can be done more efficiently than overlay coins.

You could imagine geographically isolated sidechains that take alleviate the scalability issues with Bitcoin.

You could imagine a chain that orders potential transactions on an average of a 5 second window, potentially in a pseudo-centralized manner.  For example, the entity that found the prior block gets to order potential transactions until the next block is found.  This could solve the zero-confirmation problem.

You could imagine something supporting decentralized data storage, or any other collective enterprise from DACs to web forums.  Demurrage pays your monthly membership fees (which pay the developers of the system), but you can buy and sell data storage out of this account so if you offer enough storage into the system your monthly fees are paid and you even make money.

You could imagine "inverting" the bitcoin database so the UTXO set is what is mined, and the blockchain is the history of UTXOs.  This and other features could make a blockchain that is much lighter-weight for non-miners.  The advantage here is that hardware wallets could be made smaller, for less money and more functionality put on the wallet vs the POS.

I think that services that use microtransactions haven't appeared yet because it is a totally new concept, because it is inconvenient with bitcoin, and because they are accused of being blockchain spam.  But, I think we will start seeing them on the bitcoin ledger because altcoins are failing and because the SEC may start looking at appcoins (or at least pre-sales of them) as a security.  Then the blockchain will truly go exponential and you guys will get to experience the fruits of your labor to marginalize these technologies.

Sure it would be great if these people did the work as charity, but its hard to demand that, especially for a project with a 6B market cap.  Can no $ flow to contributors?

Many for-profit companies contribute meaningfully to open source.  

In this case, the company will provide open source patches enabling sidechains to Bitcoin, and spend $ to create the consensus to get it actually included.  This might be the hardest part.  At that point, anyone can create their own sidechains.

Respectfully, I don't think you've got your head on straight in this one.  These people are acting to preserve the value you have on the Bitcoin blockchain.

Bitcoin HAS issues, with micropayments, with anonymity, with atomic exchange, and with the simple issue of having to run a full node (and all the CPU, network and disk that implies) just to accept payments (ok I know about bitpay, coinbase, but then you aren't actually accepting payments are you?  You are trusting a third party).

Without sidechains it is very likely that altcoins will be eventually successful in filling these and other application specific roles, which will have a slow but ultimately very significant effect on the Bitcoin price as "value" is put into these other altcoins.

Or centralized solutions will be successful in filling these roles.  These places will inevitably go fractional reserve, increasing the effective (if not the actual) number of Bitcoins and depressing price.  Additionally, they will periodically do a runner and engage in all the other practices that Bitcoin was made to avoid.  Essentially, if centralized solutions are needed to fulfill functions other than fiat-BTC exchange then Bitcoin has failed.

TL;DR: Sidechains preserve the value of your coins by encouraging limited supply.

PS: And as others have said, nobody can use side chain technology to steal your coins if you don't put them on a side chain in the first place.

Yes.  Let's multiply the risk of btc with the risk of an overlay currency and for this tremendous risk you get the upside of....wait for it.... the non FDIC insured US dollar!!!   Awesome!  But in seriousness, these companies strategy should be to stake a claim and then reduce burn to near zero for a couple years.

When bitshares was just starting I spent hours proving on this forum why it wouldn't work.  I think things have changed since then based on my input I hope..  For example the original formulation had no oracle.  Goldshares was supposed to track gold just because of its name.  But at that time the devs were not really capable of doing a theoretical analysis of the system to prove it would work.  So I STRONGLY recommend you do your own diligence or hire someone who can before putting value in the system.

Yes and don't go whining to the holders or to the mass media if your money is lost.  As you were sitting around raking in trading profits on Gox -- fake profits BTW that only existed because they weren't backed by real USD or BTC -- the truth is that the only reason you were able to do so is because the majority of the market players -- the true players -- were missing.  They were missing because they correctly estimated the counterparty risk and found proposal nonviable.

Bitcoin is not a zero or negative sum game.  Every time someone makes a payment or remittance in BTC someone gains 3-10% relative to the cost of other payment methods.  And for international payments, the payer saves a lot of time as compared to wire transfer or WU.

But sure, if you are day trading, this small positive sum "generated" by Bitcoin's efficiency won't make much difference compared to your trading fees.

Here's my prediction:  You are going to look back on that statement as your  "I think there is a world market for maybe five computers" statement. :-)

I'm not going to calculate it either, but the effect was actually visible 2 weeks ago.  I held off posting to eliminate statistical artifacts.

This is a theoretical calculation that does not take into account factors like rent, salaries, AC, and the variety of hashing hardware currently deployed.  Seeing the hash rate level off or even drop indicates the true level where a significant fraction of the least efficient hardware is being turned off.